Published on 26 April 2018

CSR

Primark, Ferrero, Unilever: large companies accepting more transparency in their supply chains

By refusing to publish the source of palm oil used in their products, multinationals like PepsiCo and Kellogg are not keeping their promise to fight against deforestation, according to a report by Greenpeace. Increasingly under pressure, large companies are becoming increasingly more transparent. This is can been seen in Ferrero, Unilever and Primark's recent commitment to making their supplier lists openly accessible to all.

Ferrero, Unilever and Primark have decided to make their supplier lists accessible to all, enabling responsible practices throughout the entire supply chain.
Akindo

Recently, the low-cost clothing chain, Primark, announced the publication of its entire supplier list, including more than 1,000 factories in 31 countries. This was a victory for the coalition of NGOs organised under the Clean Clothes Campaign and for the nearly 70,000 signatories to their petition demanding that big brands be more transparent.

Accessible supplier lists for all

In adhering to the coalition’s pact, Primark committed to publishing the names and addresses of its suppliers, the number of workers and their gender ratio. All lists are updated twice a year and are accessible in a downloadable format. To date, less than twenty brands (Asics, Adidas, Gap, H & M, Levis Strauss, Patagonia, Nike, or Marks & Spencer) have made the same type of commitment.

And only a few brands, mainly operating in niche markets, dare to go further. Icebreaker, a brand of outdoor clothing from New Zealand goes so far as to publish the duration of its collaboration with its suppliers to demonstrate the level of trust with individual suppliers.

A win-win situation

In a different sector, Unilever has made strong efforts. In March, the group published a list of its 312 direct suppliers and the 1,400 palm oil factories it works with. "Not only does it give us better visibility of where our palm oil comes from, it also enables us to more proactively identify issues, and address them quickly and effectively. As a result of this data being available, we are making it much easier for others to bring demonstrable challenges and insights to our attention. This in turn enables us to investigate and work to remedy issues alongside suppliers, NGO partners, governments and other stakeholders," explained Unilever.

The practice is still not very common in the food industry. According to a report released in mid-March, Greenpeace welcomed the efforts of Unilever and Nestle, the only two major companies to comply with the palm oil provision. On 22 March, after the report’s release, Ferrero joined the movement by publishing the complete list of mills that supply its suppliers.

Better risk management

If these transparency operations multiply, it is due to "the combined pressure of civil society, rankings (CHRB or Know the Chain), regulations (law on the duty of vigilance in France or the Modern Slavery Act in England), investors, and also technology, like the use of blockchain”, suggests Tara Norton, managing director for BSR (Business for Social Responsibility).

If transparency has taken time to manifest, it is also because it is the result of a long completion process towards responsibility and traceability. "Today, companies are not waiting for perfection to publish their performance, they are increasingly adopting small steps and that is what makes it possible to really advance. The more that companies are transparent, the more they earn points in rankings and stakeholder dialogue, which also allows them to make progress in theirs supply chains,” says Tara Norton.

Safeguard against inconsistencies

"When companies find it difficult to identify all their suppliers because information is not sufficiently centralised, the risk is huge, which means the company is not even in the process of detecting potential problems!" says Sara Carvalho de Oliveira, an ESG analyst at Sycomore. To gain more transparency from multinationals, investors are increasingly coming together via coalitions. By joining forces, they can use their weight to pressure textile and food industry giants, thus reaching thousands of companies around the world as a result.

Admittedly, when companies publish a list of 1,000 suppliers, investors are unable to process the data themselves, explains Sara Carvalho de Oliveira. "The goal is to allow other more specialised actors to use this data to refine the risk assessment or to examine specific cases." This is similar to what we have seen with reporting. The work of some NGOs, such as Oxfam, reveals inconsistencies in published data”.

 

Béatrice Héraud @beatriceheraud

 

 


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